tv Squawk on the Street CNBC November 14, 2014 9:00am-11:01am EST
a tiger was spotted near disneyland paris. word is this is actually just a big cat. the animal was seen by a woman who snapped a couple of photos of the animal on the hill. after police warned people to stay indoors. parents pushed to pick their children up from school and it was just a cat. >> have a great weekend. see you monday. good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer. david faber is off. m&a the star of the show on news of this halliburton tie-up. retail sales did not disappoint. ten year up to 2.36. oil is falling again, $74 and change on west texas. even brent below $77. our road map begins with moves in energy.
crude continues to fall. some americans can watch for $2.50 a gallon gas. can halliburton defend its oil business? retail sales better than expected. nordstrom earnings beat. a number of downgrades to contend with this morning. a richard branson-backed ipo at the nasdaq, virgin america. we'll have the first trade and interview with the ceo coming up. oil the big story, below $74. baker hughes confirming it is in preliminary merger talks with halliburton. "the journal" story said motivations behind the talks were unclear. i think we know what these boards are thinking. >> justice department is very good when it comes to business to consumer. they'll block a telco deal. justice department has been tone deaf when it comes to the oil patch. they allowed enterprise partners to become a gigantic, basically own the natural gas liquids
market. this would be farce if they let this deal through. the way you get halliburton to give you good prices to pit it against baker hughes. if at&t were to merge with sprint and raise prices, it is ridiculous. our anti-trust division may not understand how this works. and may not understand the overlap. it's entirely possible they just don't get it. and this goes through. that's why i go back to enterprise. they let enterprise buy everybody and never said a thing. >> still, even the combined company would be far smaller than schlumberger. >> they have certain sets of skills you use. in terms of the comical nature of this, halliburton has been innovating. baker hughes says it's innovating, too. mostly to stay one step ahead of baker hughes. this is boeing and airbus getting together. it's the oil patch. the guys from washington don't follow it that closely. >> do you think it has big
obstacles? >> only if they are as stupid as i fear they might be in anti-trust. i don't use that word stupid lightly. this is lawyers blessed the talks. they think they can get away with it. it's ridiculous. maybe you can. this is not telco. it doesn't affect you. if it affects the consumer, the anti-trust department is all over it. >> this is a second derivative of the companies. >> i'm sure they are saying we can get away with this, we can raise prices. every oil company is hated in this country anyway. will you give me a break? it's comical, but it could happen. now, if we have an anti-trust department that said let's talk to all the customers and see what's going on here, this would never have gotten to this point. a lot of the lawyers must think it's okay. i was going to say it's an enigma, but it's a farce. >> you have been consistent oil's direction would be down. >> yes.
let's go the other way. this has to happen. a fabulous conference had a conference call yesterday. do the oil companies -- everyone should listen to that conference call. >> the number $60 was said in that call. >> though were talking $75 below, people are going to say we have to scale back. there was a moment in the conference call. they said dividends. people are panicking. there is a sense of panic among everyone in the oil world. this deal will say maybe weatherford will get a bid that would pass muster. the fact no one else said this morning this deal is ridiculous shows me how desperate everyone wants to have this deal occur. >> to stop the slide. >> the slide. the slide is just huge. at a certain point we are going
to scale back. we haven't scaled back a lot because of technology. it lowered the price to $40. >> it's about maybe not doing a well you were going to do, right? >> yes. that's really the issue. some of these wells like eagle ford make a fortune. the issue had been storage. when the price of oil was $89, suki owns a brilliant company and said it's going to $60s. another said it's going to stop in the $80s. suki was so bearish. he is a visionary. no one thought it would go there. >> on the consumer front, people are talking $2.80. $2.50 in a big number of markets. >> you sit down with ceo's. i sat down with the ceo of
popeye's. she is a great operator. she said what is driving comparable store sales other than the terrific beer can chicken, gasoline. a little bit more money in the pocket. this is an untold story. let's be marxian. we are wealthier than the average people, we don't feel it. when you talk to people who actually for a living have to drive 60 miles. they can't believe that they have this spare change. it's a big rebate from opec and some oil companies and doing remarkable things. today was the first day the "times" said it. wow what is this going to do to anadarko? they are going to do fine. how about america? >> on that front, lower gas prices giving consumers more purchasing power last month. retail sales rebounded in october. up by better than expected 0.3%.
take out gas purchases, sales rose 0.5% after falling in september. nordstrom, better than expected results. comps up 3.9 in the period. we got downgrades on half a dozen names in retail. >> i wanted to buy every one of those, tjx. not abercrombie and fitch. they have to leave the office. i would tell you the nordstrom call -- they are so good. nordstrom is so good. they talked about their opening in calgary, which i thought was funny. first store in canada. they had great comps there. target opened 125 stores in one year. it's a $900 million loss. nordstrom does everything right. they opened a couple of stores. by the way, in terms of the way they handled their conference call and how open-handed they play. first thing, they had too much inventory at the rack.
the outlook was terrific. if you want to sell nordstrom, i want to buy nordstrom. they didn't give themselves credit for omni channel where they spent a couple of billion dollars to have top notch technology. this is a fantastic company. >> you mentioned abercrombie and fitch. credit suisse cuts it to neutral. target goes from $53 to $28. >> abercrombie has stuff overseas. they are talking about dramatically cheaper prices. the one thing i don't buy about this, the kids who shop there aren't as price competitive. they don't pit aeropostal versus abercrombie. the numbers in the basket of these deep value discount eers they are extraordinary. this is one more reason to sell amf. the guy who runs amf is on the
wall of shame. feels like the babe ruth of the hall of shame. an original inductee. right in the thick of things. bingo. >> bmo cuts walmart to underperform. >> they had a hold on it for the whole run. sorry, guys. you missed the big one. now you are going to try to get involved and make a statement? i reiterate, i thought walmart was good. i got a lot of blow back @jim cramer on twitter. most people wish i would go away. not anywhere where you could see me. there was negativity that i thought walmart might be getting better. i'm going to respond, go to some. actually visit, recognize that the smaller stores are good, but mainly what's happened, walmart has gotten the product people want. it's better. walmart is not as bad as it used to be, which is enough to move
the stock. >> it's a town square. >> there's a lot of village idiots on twitter. >> a couple of valuations. stern cuts nike to neutral. average price target is $96.70. >> there are a lot of stocks. i saw this in the 90s when you didn't see it -- since the '90s. stocks gallop here. you look at 3m. analysts are going to fight it. they've never seen anything like it. analysts tend to be much younger. they never see it when you see nike go from $40 to $80 in a straight line. we are in that kind of market. they are not used to a bull market. this is the old -- i used to joke about it. stocks $90 go to $120. there is no rigor to that analysis other than people are paying more and more to be in winners. this is the apple issue. if you don't own apple at the end of the year, people say i've got to take my money away from you. that was the biggest company in
the universe and you missed a 40% rally? nike is a loved company. put up good numbers. bf is the same way. when it gets cold, north face. >> which it is. it's making its way to where a lot of americans live. >> sell nike, sell walmart. buyers are going to be all over these names. >> got a lot more to cover this morning. another setback for hertz which lost 1/4 of its market value. we'll get you details next. >> richard branson's virgin america going public. stay tuned for a live interview with the ceo david cush. we are halfway through q-4. it is by far the best quarter of the year for the dow. >> people have been fighting this. when the fed stops buying bonds. >> a lot more in a minute. go ahead and put your bag right here.
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"hertz announces new u.s. rental car fleet strategy." has nothing to do with the news. >> i heard over and over again, i always think accounting irregularity equals sell. i have been getting comfort from people that these irregularities were small. there is no comfort. when you see accounting regularities, anybody at home, your company has that, just go. pricing is very good. avis is doing well. i made that same argument in the mid $20s, when they kicked out the ceo, everything would be fine. he said he wanted to spend more time with the family. family is so important. it is just amazing how bad this one is. it's terrible. >> the positive elements of the market do not offset what's going on here.
>> avis has come down a lot. i'd rather buy avis. they are kicking butt. hertz is in disarray. there is a core business there, no doubt about it. these are hedge fund favorites. if you're a hedge fund, look at avis with 65%, hertz down 7%. hertz has to try harder. >> ford yesterday was up 3%. any idea? is this an f-150 play? there were numbers out of europe. >> i don't know. china has been playing with the numbers. i think the f-150 will be a big hit. the problem with the f-150 it's not a gas guzzler at a time when gasoline doesn't cost that much. >> something to keep our eye on. >> there are a lot of companies betting on higher gasoline and are doing things to be able to really convince the consumer it's the right thing.
the natural gas company were. there is a percentage of this company heated by oil. even in new york city. new england. it's going to be tougher to lean -- the payback won't be as easy to switch. >> like watching dow chemical. >> dan lobe has a new funny video that is a spoof of dow. i think it's a spoof of itself. it's not exactly the great movie quality we do at cnbc. 80% of dow's business is not related to oil. that's something put into place. lobe, this is third point -- they make it very personal, very quickly. they put up two people. they have one with steve miller. and a guy from foster wheeler, hired guns to get on that board. lobe wants to split into good company, bad company.
i happen to be fond of what he's done. what makes me fond of liveress, chemical average is 9.8%. he's beaten everybody. five years, $1.45. before we kick the bum out, let's look at his numbers. he's made the playoffs. it's not like playoffs. he's made the playoffs. >> something big at the nasdaq today. simon hobbs has more on that. >> good morning. it's a big day for the nasdaq here. mainly because virgin america, the ninth biggest airline in this country is ipoing. they priced above the middle of the range last night ranging $300 million. valuing under $1 billion. many questions to ask the ceo later on david cush. "business week" asked if it had too many thrills to be a good investment.
david cush will join us on a first on cnbc interview. >> nasdaq unveiling a new television studio. this is above the one which "fast money" comes from every day. importantly behind me, you'll see they introduced a human element. this they tell me is the market intelligence desk where they are monitoring all nasdaq trades. at the end of that desk is an ipo execution officer. a human element they tell me has always been there would you see more obviously at the new york stock exchange. they want to make it more obvious to people. as we track through the history of ipos. the other thing is a great view of times square here. let me show you that before i send it back to you guys at the nyse. great morning here in new york. this is the view you get from just outside the window here. the new studio of the nasdaq market site. back to you.
>> very nice. >> jealous. >> a lot more lunch options over there. go to hard rock after the show. >> very true. >> when we come back, cramer's mad dash. we'll count down to the opening bell. later, raise your glass. "wine spectator" magazine will reveal its number one wine of 2014. >> take a look at futures. s&p's up 200 points now from the october 15th low. more "squawk on the street" straight ahead. there was no question she was the one.
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>>. >> just about seven minutes till the bell. let's get cramer's mad dash. we were chatting with the irish prime minister. >> what a joy he is. just fabulous. >> retail downgrades. tjx and ross stores are down. >> these are two fabulous companies. okay? really well run, great discounters. precisely the kinds of companies i want to buy when gasoline goes to $2.50. i think these are places to go rather than sell. they are both too well run to dish. ross had a big move. be careful selling these. these are excellent companies. >> estimates too high. valuation too high. >> no. not after walmart. you could argue maybe tjx isn't going to get the inventory because they've come in with cash buyer inventory.
these are well-run companies. i think they go higher. >> irwin simon was on our show last week from hain. maybe the two or five-year chart is one of the best looking charts. >> he always predicted to me one day walmart would become the big gorilla. walmart is saying to hain, you could argue this is an irwin view. high, guys, here are three aisles. fill them. >> that is crazy. >> this is the natural and organic theme. you want to get -- this is what general mills should have bought. they get it for $8 billion. walmart's push was so really emphasized in the prerecorded comments. all you could think was irwin is going to coin money. he's got stuff in every aisle. he built a great american food company and has business in europe. he is probably the most forward-looking executive in the food industry.
>> wouldn't you have been tempted to take some off here or here? >> not with irwin. he's a killer. he exists to compete. he's amazing. >> you think the market can sustain more? >> you like united natural food, too. irwin simon, when that stock was hit -- i think "barron's" hit it a couple of times. if you have any guts, come on the show. are you kidding me? i'd be thrilled to. this is a great buying opportunity. i just believe when you look at the kellogg's and look at general mills, campbell soup, all they can do is buy irwin simon out. he is building the great worldwide food company. he's terrific. >> opening bell a few minutes away.
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global m&a is going to hit $3 trillion. >> it's amazing. halliburton wants to be in a lot of markets. the goal was to get them to compete on everything. how much better to just have them merge like all the airlines were allowed to merge? all the prices go up. it's great for shareholders. there is that problem with users, but hey justice department. halliburton doesn't have to spend all this money to compete in those areas. they can buy them. it's a match made in heaven for everybody other than people involved in being customers. >> the last four closes on the s&p. 2038, 2039, 2038, 2039. >> that's almost like it didn't happen. >> what's going on? >> i don't know. >> cracking through 2040. >> a lot of people feel we are one step away from the big decline.
ukraine will happen this weekend or oil is signaling things are bad. there are a lot of shorts going against the longs. it's imbalance. >> we'll find out more in the days to come. let's get the opening bell and look at the s&p at the top of your screen. at the big board. irish prime minister doing the honors. over at the nasdaq, virgin america celebrating its ipo today raising more than $300 million. richard branson, minority shareholder. our simon hobbs will talk with the ceo david cush. what does this say about the airline sector? >> there are plenty of good airlines. spirit is a good airline. they do a great job. american has done a fantastic job. you don't need to be involved with this one. go with the ones i think have proven themselves. >> even with the transports since the october low, we are going on a 20% gain soon.
>> gasoline. gasoline is the principal ingredient. there was an ebola hiccup where they didn't have a decline in use. the justice department blessed a lot of anti-competitive root structures. they said listen, we'll give you guys the store. the store feels good, especially when your costs are going down. >> baker hughes will be the biggest gainer followed by hog. >> brunswick, polaris and harley-davidson are signs the consumer is alive and well and spending. particularly to the upper middle to wealthier class. polaris has a competitive motor bike. all three of those, hog, polaris and brunswick are things you don't need that do well. >> other winners, halliburton,
schlumberger, nabors, noble. >> that group is so heavily shorted. you should see that -- if you look it starts at $84, goes down to $77. then does a u-turn. the world is short these stocks. this was the hedge fund annuity. if these two are allowed to merge -- >> you would vote against it? >> i would tell them, guys, give me a break. do you think we are this stupid? do you think we went to college to get stupid stupid? >> we do have breaking news on the postal service, i believe. >> that's right. the united states postal service is announcing this morning post master general patrick donahoe is going to retire in february after 39 years with the postal service. he oversaw an organization that slimmed down dramatically under his tenure. down by 220,000 employees since
2004. donahoe has been post master general since 2010. this is one of these overlooked jobs in washington because it is the second highest paid government job there is. it's also a job that was once held by benjamin franklin. donahoe's successor faces a real challenge trying to figure out what to do with the postal service as it faces intense financial pressure as a result of e-mail, the cost of printing and mailing and managing all that staff. all of that a real challenge for the successor here to donahoe. the post master general will be selected by the board of the postal service. we'll have to see who gets that job and what direction the postal service goes from here. >> comes a week after they were forecast -- thank you -- for the holiday season 12% to 14% increase for package volume? >> the free ride for the catalog companies has been amazing. it's a great thing for restoration hardware, fantastic for williams-sonoma. these guys have been the big winners because they don't have to pay their own way.
everyone knows that. we have the best government money can buy. that's one of them. it's another shame. again, if you're williams-sonoma, stand for the companies. williams-sonoma wins. i like that cassoulet pot. >> what about government versus businesses being able to duke it out? mark cuban's tweet on neutrality comparing the debate to something out of i rand? did you see this? >> no. >> arguing what the government is proposing is straight out of a darby and john gold. >> if you freeze spending for the telco companies, you are going to lay off a lot of people. someone said yesterday, that is such a republican view point. i don't know, i'm pro-hiring. you heard john chambers yesterday. the telco companies don't know what to do.
remember, all the telco companies want to do is have clear. if the fcc says one thing and obama says another, they don't know what to do. they are not saying let's just go with the president. they are regulated by the fcc. they are frozen. they are not necessarily -- the people who run at&t and verizon are very thoughtful people. most people feel like anybody you have to send a check to is an idiot. they are very good. they don't know what to do so they are just stopping. >> biogen is going to have a rough morning. citi removes it. >> saw that. they elect some other guys. >> celgene is in the mix on the down side. >> you buy celgene. it's not down enough to buy it. they have isis. i had a the doctor on who had
the name isis first. he has to deal with that. the biogen was one of my four horsemen of the big forma apocalypse. people worry about pricing, competitive product. abbvie important upgrade. deutsche starts abbvie with a buy. >> i talked to nelson. he's done great things with wendy's, legg mason and heinz. i wonder if that isn't an option exercise. he has not said listen, i just bought more pepsico. i know he has said over and over
that it is not doing enough. even though the stock is up 18%. coca-cola has gotten a free pass the whole way. dr. pepper is up the strongest in the group. >> i think it has outperformed the sector in past periods, as well. >> the guys at dr. pepper, they are like soda guys. they senlt a palette to mayor bloomberg. did he not get a joke. >> we don't talk a lot of politics on the show. >> no. thank heavens. >> there is this bubbling school of thought there may be a showdown regarding the short term funding resolution in congress in december if the president decides to go ahead with his executive action. are you worried about government shutdown or not? >> when i read these stories, the republicans have been complete liam bushed by the
president. he's just out there acting as if he's won. "new york times," the coverage is a little bit surprising. immigration would keep wages down. they never want to hear this. the orthodoxy is you keep wages down. i'm not talking about immigration per se what i think of it. it would help housing. one thing that hurt housing was the no doc. the no doc was a big issue in california. immigrants, florida immigrants, where the housing markets were hurt so bad. it's real why i great for housing. if you're an employer you keep wages down. >> regardless of your politics, if he does it? >> it's very good for housing and employers. that's just what happens when you get offline. i run a restaurant. i have well documented. you would be surprised what people will do if you could get work visas, permits.
there would be a lot of people who are really difficult to hire without fear you will be closed by the government. this is very major this story. you've got to stay on it. it's so hard to talk about immigration. i'm saying what the employers have told me would happen. >> right. we'll keep our eye on it. dow is down about six points. bob pisani on the floor. >> oil is up, energy is the leader. really, oil services stocks are the big leader right now. let me show you what europe is doing. we did have q-3 gdp. as anemic as it was, it was better than expected. germany gdp, third quarter up 0.1%. france was up 0.3%. italy shrank 0.1%. generally, that was better. that's how sad things are over there. 0.1% is considered a victory in germany. in the u.s., nordstrom impressive numbers. they bucked the trend of lower sales in department stores completely. the real standout, comp store
sales 3.9%. that was much better than expected. 3.3% comp store sales in the second quarter. this company is doing well right now. the offprice business is doing well. the online business is continuing to grow. none of the other department stores are doing much today. they certainly deserve a nice move to the up side. they are up fractionally there. cosi have a problem. they blame it on higher food costs. i've been using this as a theme the last several weengs. there is a lock line of food and restaurant companies that blamed higher food costs. pinnacle, dean, sysco, texas road house, papa john's, noodles. a dozen companies cited higher food costs. there is definitely inflation in the food chain overall. there you see cosi down fractionally.
hasn't been a grit performer recently. talk about ipos today. hope you'll stay tuned. simon hobbs will be talking with the ceo of virgin america. they priced 13 million shares at $23. good pricing. a strong brand name overall. got a lot of loyalty. known for their wi-fi, generally good service. the last ipo that went public was spirit airlines. was early part of may 2011, as i recall. stay tuned, simon hobbs. and also fibrogen. this would be, we pull this off, second biggest biotech this year. they provide oral therapy to solve anemia and fibrosis.
we were waiting for china's ehi car services. it didn't make it they were supposed to ring the opening bell here at the new york stock exchange. it was postponed because the ipo itself has been postponed. no clear reason why. they did have a filing last night. there have been some allegations that the company may have misrepresented the size of its fleet and other allegations. i think that is the likely reason. at any rate, that's been postponed. we'll see if they get that in the near future. it's largely the oil services group. you see baker hughes and halliburton. schlumberger had a nice move up yesterday. weatherford was up at the open, now on the down side. dow's down three points. back to you. >> thank you, bob pisani. getting word janna going into mcg among other names. >> this is big. there's got to be an activist.
jim skinner chairman of walgreen formerly ran ceo of mcdonald's. janna is going to push for change. mr. rosen stein will push for change. it is a stock that is cheap. hasn't done anything this year. they are doing things right. my charitable trust owns it. i feel janna is not going to rest, i think. they are going to do something. when you speak to greg watson ceo of walgreens, he think it's very constructive. i wouldn't be surprised if maybe barry rosenstein who david faber knows well might want to be involved in mcdonald's rather than just having a big mac, fries and diet coke. >> a nonexecutive chairman of mcdonald's said they are happy with don thompson. >> it's an inexpensive stock with a good yield, great balance sheet.
they can do a lot of things. >> let's get to the bond pits and check in with rick santelli. >> 4-2-1. fives are up four, flattening usually means we are going to probably see yields tip down more today. watch that five-year, especially around 1.65. 14, 17. 14th day ten years are going to close in a tight range between 2.30 and 2.38. 17 days for 30-year bond yield between 3.02 and 3.10. it's flattening. there is a lot of trading. a solid retail sales. i like to look at nonseasonably adjusted. that was strong too. if you look at interday boon, same dynamic. let's go back to the bond, open the chart up to august. you can see why 2.38 will be big
resistance. santelli exchange the other day, the average 50% retracement between the recent high yield, exactly at 2.38. let's look at 24-hour chart of dollar/yen. your screen scaling isn't wrong. 116.60 depending on which set of data points you look at. that's a fresh low on the yen versus the dollar going back to right around the fall of twoechb. two-day pound versus dollar. pound continues to get pounded. you open that chart up, this is a fresh 14-month low on that currency versus the green back. carl, back to you. >> thank you, rick santelli. we are on ipo watch waiting for virgin america to open for trading. simon's live interview coming up.
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professional sports. he is where it should be brought out of the underground and into the sunlight. he cited the new jersey bill as an appetite for online gambling. congress should adopt a federal framework that allows states to author he's betting on professional sports. you talk about fantasy betting. it looks like the leagues are looking for growth and this is a way to get people to watch. >> everyone knows it's, people talk about the $50 billion, $20 billion industry. the nfl doesn't like to talk about the line. the nfl will fight this tooth and nail. this is great. they just don't want to hear about it. this was a breakthrough. silver is an intellectual. >> what about the so-called negative extranalities on
gambling in society. >> people do it. >> you mean informally, office pools? >> yeah. and those who do it with bookies and stuff. it's not like marijuana where you can prove with younger people their brains get hurt. it's something that is done and should be regulated if it's done. i remember when there was only gambling in vegas. the idea it might come to atlantic city was breathtaking. now anything can happen. i love to hear what goodell has to say about this. they discouraged talk about gambling. >> after the clippers and this, silver has come out with a bang. >> he is way out there. we'll get stop trading with jim and breaking news on consumer sentiment.
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thank you. ordering chinese food is a very predictable experience. i order b14. i get b14. no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. and often even more. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $89.95 a month. comcast business. built for business. time for cramer and stop trading. >> usually business is done at a high level. i want to urge people to go and look at the dow chemical video. i think it's amateurish. this thing has gotten very personal, very quickly.
andrew livers. this is ridiculing him. using old clips when he was on years ago. be careful, he is doing a lot of good things. this is just starting up. this is going to be where dan lobe wants his guys on. it is the most personal, just vicious attack on a ceo that i've seen in some time. >> just getting started. janna mcdonald. mcdonald's is the best performing component of the day. what is this renewed activist activity saying where stocks are? >> activists have been going after companies that in many cases like dow have done well. but everybody listens. dow has been taking dan lobe seriously. they just had this gigantic love fest.
right on top of that he does this massive satire of dow. i'm surprised he doesn't have medians. they have more money. they can burn money. i think it's amateurish but it is making the round this video. making the rounds. >> let's get consumer sentiment with rick santelli. >> holy cow. 89.4. that's the november preliminary. we'll get the final read at the end of the month. if we look at that in the context of all the other final reads, it takes out last month's 86.9. why is that significant? because that was the best level since july of 2007. our next comp is february that same year 91.3 we didn't quite make it here. 89.4 solid follows solid retail sales. back to you. >> we'll check in with you a little bit, rick santelli. >> that can turn the market
around. retail sales. there was also ebola. it's gasoline. stay in front of it. huge game changer for about 50% of this country that found money. the wealthier people. >> what's on "mad" tonight? >> lam research has been the best of semiconductor equipment companies. they do not talk much. martin has done a remarkable job. i'm going to have an analysis of a $2 stock that many people want to find out about that. tune in tonight. we have a good show. what a week this was. i love working with you so much. >> this weekend will be eagles/packers. >> that will determine whether i go to arizona between the end of january and beginning of february. that's going to be the game. whoever wins that game will be the nfc champion. >> best of luck to the birds. jim cramer of "mad money." 6:00 p.m. night. >> virgin america's opening
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welcome back to "squawk on the street." we are going to be putting the tomb stone on inventory numbers for third quarter. the can figure with those revigs. survey says up 0.3%. better than expected. may add to the revision on gdp. if you look at july, august, september, three months third quarter business inventories were up 0.4. 0.1 instead of 0.2 they revised last month. of course, it adds to what has been a solid u.s. economic day regarding data point. carl, back to you. >> thank you very much, rick. sara and i are here post nine while simon is at the nasdaq. first up, let's get a check on the markets here.
it's been muted action on stocks. s&ps had trouble cracking 2040. crude continues to be the story of the day. >> having rebound right now. not far from four-year lose. u.s. stocks moderately lower. a lot to cover with our next guest who says positive third quarter 2014 earnings surprise. that's helped fuel the recent market advance. the target is $2,200. citigroup chief equity strategist with us. pretty much in line with what other equity strategists are forecasting. looking at retail sales, is the impact of the consumer priced in at this point? >> investors should realize about a $10 drop in price of oil is about 0.5% of consumer spending. that is a big deal. we had about a $20, $25 drop.
that will set us up well for the holiday season. that is a one-year phenomenon. you can't expect that kind of thing to keep going. >> as we look at the gains here going into a seasona a seasonab period for the market. investors are getting euphoric. >> the market was too positive for september. our sentiment model is sitting right at the line. set us up for the turbulent market, if you want to call it, late september/early october. now we rebounded not quite up to that level. we've seen the sentiment move up meaningfully from depressed levels about a month ago. >> we are still near the highest levels of optimism for the year, right? >> no. we got into the euphoria territory in the march/april time frame.
this is a good short term, not just longer term indicator for us. i think the market's probably ahead of itself. people are too excited about the fourth quarter rally and late-year phenomenon. >> we have virgin america opened for trade. simon might have more on that back at the nasdaq. >> good morning to you. welcome back to the nasdaq. virgin is trading at 26.75. it priced at $23, mid point of the range. valuing the company up to $1 billion. this is the second biggest airline ipo ever. the first one we had in 12 years. still a lot of concern into whether long term it will be a good investment. given the fact it is trying to pitch itself as a frils airline in increasingly a value environment. we will talk to david cush later in the show, the ceo and president of virgin america as the stock gains 20%. back to you guys.
>> thanks, simon. we'll check in with you later. tobias levkovich here. you can't common on individual names. virgin america, not a bad time for an airline to go public. >> i was so tempted with the pun of it's taking off. >> leave that to the media. seriously, this has been a group that's been on fire, fundamentally speaking. with the help of those lower fuel prices. >> airplanes have done a number of things right. they got costs under control. they reduced capacity in terms of how many planes out there. for those of us who fly a lot, planes are full. you hope for that empty middle seat, but it's not there. at the same time, oil prices are coming down. they have pricing power. that is a nice combination. >> is $2,200 year end '15 or '14? >> '15. i think the market a tad ahead
of itself. >> 10% gain in 2015? >> just about. 7%, 8% on the earnings side. i think valuation is fair on market emphasis. if you look at history, they'll say markets are a tad above historical averages. >> you don't buy the notion that managers are going to chase what they wish they owned in the middle of october? >> it's become too consensus a view. everybody is talking about it. i was in asia and people were upset we weren't more bullish. we were in europe and heard the same thing. you're not bullish enough. i get nervous when everybody tries to go to the same side of the trade. >> to the degree anyone does chase anything, are they going to go for value or momentum names at these valuations they want to show they own? >> i suspect momentum. investors are horrible at times chasing the tape. we shouldn't be that harsh on our clients, but sometimes they are.
>> i know you're encouraged by earnings. is revenue growth where it needs to be? >> revenue growth is fine at 5%, 6% level. it isn't as strong as people like. commodity prices coming down hurt those sectors. >> strong dollar. >> and the dollar. the combination of both. >> that has to be a head wind going into next year. >> it is, but isn't. 70% of s&p 500 sales are north american derived. while we are not looking for robust growth in europe and looking for lesser growth in the emerging markets, we are not looking at recessions either. >> are you impressed with the market's ability to withstand the end of qe? >> it should. >> that's not what a lot of people predicted. >> i tell investors, 60%, 70% investors have ten years experience in markets. their view is a crisis then really aggressive monetary policy. if you go back 20 years, 30
years, 40 years and think about when fed policy withdraws, it's when earnings are growing again and businesses are starting to spend. businesses are looking to hire. you see mergers and acquisitions. they are doing all the things that would intimate a revital of corporate annual spirits. >> and raise interest rates. judge, that's normal. people forget what normal is. >> tobias, always good to have you here. >> combining two of the largest names in the oil industry. jacqui deangelis with that. >> that's right. balker hughes confirming it is in preliminary merger talks with halliburton. a deal like this if it were to go through would create an industry giant worth $67 billion. pretty significant. that is still half the size of
schlumberger whose market cap is $225 billion and leader in the space. bringing these two companies together would be a big deal. i want to discuss why talk about it now? most people are saying they think it's this recent decline in oil prices and projections that oil prices will decline further, maybe to the $50 range. that has gotten the conversation going between these two companies. not only would you have cost savings when you bring the companies together, you would be combining their technologies. also, you would be combining their intellectual property. a lot of people say that is very important. critics have been looking at this deal saying there will be a lot of regulatory issues here. especially when dealing with a merger of this size. that is not going to make it an obstacle that couldn't go through. the other issue is regulatory issues you might face overseas. you would have countries like china, europe, brazil and mexico also looking at a situation like
this. the oil field service companies abroad are few and far between. baker hughes shares were halted yesterday on this news. they spiked 20% when they did start trading. today seeing halliburton, baker hughes, schlumberger higher on this. this would be the second largest energy deal we've seen this year behind kinder morgan when it said it would bring its units together. that was a $70 billion deal. a lot of eyes to see if this will go through. time framewise, a lot of hurdles to get through. >> what a week. jacqui deangelis. how the iphone 6 and disney's "frozen" could be responsible for making this holiday shopping season a successful one for retailers. dow is flat. financial noise financial noise
welcome back to "squawk on the street." let's check out shares of petrobras, the brazilian state-run oil company. the stock plummeted after the company delayed results amid a police investigation. police arrested 18 people in suspect of money laundering and bribery scheme. the big news down at the nasdaq is we had our first trade
on virgin america. quite a big bounce at the open. it priced at $23. it's risen substantially. it has a gain of 24% there is some euphoria or there was in the studio above me where you can see there the virgin america senior executive team and a number of staff members. we will be talking to the ceo and president of virgin america david cush in about 15 minutes time. an interesting stock and many questions whether or not such a flashy airline can be a good investment. in the meantime on the broader economy, retail sales coming in better than expected this morning. up overall by 0.3%. if you strip out oil and gas and fuel and automotives, it's even better. up 0.5%. therefore, a good omen just two
weeks away to black friday and the holiday season. according to our next guest, higher unemployment and the strong u.s. dollar will support consumer spending at this crucial time of the year. michael gregory deputy chief economist. welcome to the program. >> morning. >> it seems to be such a mood of pessimism about what the holiday season may bring. you are taking a different stance. a top down approach, i guess. >> absolutely. first and foremost, we've got decent job growth. nothing like creating a million jobs every four or five months to get consumers into a buying mood. add in lower gasoline prices, lower heating oil costs, stronger dollar pulling down import prices, you've got solid consumer spending. >> why do you think so many people are negative at the moment? a lot of retail analysts seem down beat. how do you kind of square your thoughts with theirs? >> another factor that will likely get consumers spending,
continue aggressive discounting by retailers. that's where the retail analysts have a little bit different than our view. consumers are going to be spending more. will retailers profit from that? that's the uncertainty. >> i have a question on the link between the labor market improvement we've been seeing and retail sales. why isn't there a stronger correlation there? we've seen 200,000 jobs created each and every month. more americans are quitting, a good sign they are confident they can find new work. why isn't that translating to higher retail sales and consumption numbers? >> the belief as to whether or not that strong job growth will persist. it's a confidence issue. wages themselves aren't growing rapidly. that is a cause for concern. whether or not we get a good holiday shopping season or great holiday season is whether we can unleash that confidence effect. are consumers prepared to dig
deep in their wallets and take out loans because they truly believe the job market is solid and they start spending more money this holiday season. >> you lost me. we started the interview with you saying to us it was going to be a great holiday season. now you say it's a question of confidence and the jury's out. >> obviously, good is better woon he had the last couple of years. looks like a solid 4%, 5% year on year growth in sales. can we get 5% or 6%? that's the big difference. whether or not consumers are prepared to believe wage gains are just around the corner. what we are seeing on the ground now is solid job growth that will continue into the new year. >> you mentioned another big question would be whether retailers profit from it. presumably, if you are a retailer, you know you are going to go into a discounting environment from the get-go. you bear that in mind when you're with your buyers working out what to buy and at what price. none is a surprise to a big retailer, surely. >> absolutely not.
they factor that in when looking at their retail sales volumes, projections. hopefully they'll cut prices a little bit and you'll end up with more sales as a result net/net okay sales revenue. again, it's a situation where if it turns out that consumers are, in fact, responding to the job growth, responding to the incentives to spend more money, maybe we don't get as much discount as we otherwise would. there is always that prospect. we get several rounds of discounting. maybe the first round goes through. maybe not the second or third round. >> i'm looking into what your team is saying. it's the gamers you think will profit the best. we have to leave it there. thank you for joining us. >> thank you. up next on the show, what are the chances for tax reform now that republicans are in control of both houses of the cook? pulitzer prize winning "new york times" columnist jim stewart will take that up. location. location.
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as marijuana legalization gains more and more, co-founder of ben and jerry's thinks the companies will be vying for a piece of the pot pie in the future. kate rogers live at the marijuana conference in las vegas. ben cohen is a very big advocate for pot legalization. not just because he is hoping more customers get the munchies. he told us here at the conference, he thinks one of these start-ups could be become the ben and jerry's of the cannabis industry. that will have big businesses wanting in on the action. >> make a lot of money. i guess my hope would be that this industry is not taken over by existing big businesses, but that the businesses here remain independent and that they become
the big businesses of tomorrow. >> any advice for marijuana entrepreneurs just starting out? >> my advice for marijuana entrepreneurs is to imbue your business with social values. use your business as a source of progressive social change. use your business to support the community, to help people that have been disadvantaged. >> what is the best ice cream flavor to go with cannabis? >> well, i haven't really thought about that. i think whatever flavor you're into probably works. >> do you think we'll see a ben and jerry's themed one? >> i like cherry garcia. that's been my all-time favorite. >> hey, guys, if they come out with that cannabis-inspired ben and jerry's flavor, they would have plenty of customers from
the conference lining up for a taste. >> that is the one question everyone wished you would ask and you did it, kate. cherry garcia. >> mine's chubby hubby. >> republicans campaigned on it. with the gop now taking control of both the house and senate too next year, might a tax overhaul be possible before 2016? joining us post nine, pulitzer prize winning columnist and cnbc contributor jim stewart. you think compromise is possible on any issue? >> well, look, i've been beating this drum for years. i have kind of given up on the idea. i think the stars may be aligning here. i'm very cautiously optimistic. i had good interviews with republicans and democrats. on the framework of tax reform, the parties are not that far apart. a couple of things happened that might help. republicans want to show they can do something. obama wants to burnish his
legacy. there are some key issues that republicans support. >> did inversions have a big part of this? >> that didn't really come up. that's a specialized thing. the corporate tax reform could do that. >> it was a good mainstream story not too long ago. >> it's an important issue, a legitimate issue but can be addressed as part of this broader framework if they will get past immigration. let's all calm down. that is a different issue. i had a great interview with david camp, chairman of the ways and means committee. >> what is going to be the sticking point within that tax reform? >> you've got to get over the issue is this going to be
revenue neutral or not? one thing representative camp said let's put that issue to the side now. that would promote growth, promote fairness and everybody agrees would be better for the country. let's look at revenue impact. so what if it isn't exactly neutral? maybe that isn't the be-all of tax reform. >> do you think it will have to come with an infrastructure spending mackage ining package president to sign it? >> one of my pet peeves here is the carried interest loophole which is still there six years after obama said he would get rid of it. people estimated $10 billion to $15 billion. one professor said $50 billion. >> hedge fund managers and private equity and lower tax rate and capital gains. >> the richest 0.1% will
privately admit this isn't fair and they don't need it. then they'll lobby for it. they get all this money. you get $20 billion, if you want to put that to infrastructure spending, could you do a lot. this country needs it. >> there are stories in the "times" today about how net neutrality, climate change, immigration, the president is actually girding up for fights. not compromise, fights. it's only days since the midterm. >> we've been watching them fight for years. has that gotten us anywhere? i'd like to think there is more to fighting going on there but that's the pattern. >> market temperature, you feel p comfortable be long stocks? >> i'm sitting pat. the stocks have been very firm lately. we got over the october foibles.
i'm watching more closely interest rates. we had the sudden dip down in october. things started creeping up a little bit. fed last week was talking about there may be volatility. sounds like they are saying we are going to raise in 2015. i think they've been sending that message loud and clear. >> always good having you, jim. >> thank you. we'll bring you the ceo of virgin america live for a first on cnbc interview as the stock begins trading the first time at the nasdaq. currently up 27%. they're coming. what do i do? you need to catch the 4:10 huh? the equipment tracking system will get you to the loading dock. ♪ there should be a truck leaving now. i got it.
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welcome back to "squawk on the street." i'm jacqui deangelis live from the nymex. we just got the weekly natural gas inventories delayed because of veterans day from the department of energy. we have a build on our hands. 40 billion cubic feet. that was in line with what platz was looking for and traders were expecting. this is a smaller build than last week. 91 billion cubic feet we saw. prices are going lower. we were at the $4.03 mark, $4 now. nat gas has been volatile because of the predictions of the cold weather that is on the way. it's priced into these numbers right now. it is getting colder out now, especially here in new york city
and windy, as well. demand is going to increase. i want to remind you of a couple of things. traders are looking at total stocks of the year. that number 3.5 trillion cubic feet almost in line with the five-year average. also in terms of rebuilding the stocks from the depletions last year, we had record injections. traders feel good about this. nat gas prices now under $4 at this point. guys, back to you. >> thank you, jacqui. check out where we are currently trading with virgin america at the nasdaq. it priced last night $23 a share. substantial gain for those people across the country involved in that nine-day road show and got in on the stock. it was priced just below $1 billion. the ninth largest airline in this country is valued $1.25 billion. joining me in a first on cnbc interview is david cush, president and ceo of virgin america. welcome to the public markets. >> thank you. >> we've been waiting for you.
>> we have. >> timing is very good. your bigger rivals are recording record profits. jet fuel plunging in value. you were able to move to profit last year. >> it was good getting the company ready to go public and finding the right time. we did our part and the market did its part. >> speaking of doing your part, you did nine days on the road show. for an ipo of this size is a long time. you left no stone unturned across the country. what worked best in explaining the airline? >> the key thing we wanted to talk about is the fact even though we are a high-quality product, we have a low-cost model, a simple operating model. we think one of the pure models, single fleet type. point to point. ears deviated from it. we stayed true to it. >> now you have to report quarterly results, debt.
you have a desire to have a more market service. that costs more than your rivals. delta and american are doing up their fleet. >> our costs are lower because our production model is simple. yes, they are putting amenities onboard aircraft, but we have 30% cost on head-to-head markets. >> southwest and jetblue are cost effective. they are under huge pressure from analysts to reduce the leg room, to increase fees for changing a ticket, to charge more for baggage. in your environment where you still have richard branson as a key shareholder, would you be able to do that? >> we charge for baggage. we think there is a customer-friendly way of doing that. as far as jetblue and southwest, we have a revenue premium. we operate on a unit revenue basis. we operate where the legacies are. we've got about a 25% revenue premium on like to like market.
>> richard branson remains a shareholder. you warned any adverse publicity surrounding richard or virgin would have an adverse reaction. how has the galactic crash affected you? >> it hasn't affected us at all. they are trying to do something visionary, very difficult to do. >> road show? >> not at all. >> you are a veteran of the industry. you spent 20 years at american. you know most of the other ceos personally. we discussed it in the past. as you look to expand out of california to more routes, how are you going to stop these big guys whose valuations are bigger than yours, predatory pricing, putting volume next to you to undercut your efforts? in july you warned specifically of what you called aggressive competitive practices from united. that could hurt you. >> look, this has been the way it's been since we started. when we go into a market, we see
aggressive competitive response. generally doubling capacity by our competitors. we found it's more harmful that their income statement than ours. >> but they are bigger and can cross subsidize. >> that is what they are doing. they are losing money when they come in and make those moves. we are able to operate at a profit even though they basically destroy their own market. >> how do you feel about that? how do you feel about doing business in the airline industry? >> well, it's basically legalized warfare. that's what it is. it's an aggressive business. it's a network business. these guys are smart guys. >> dynamic pricing must make it more of a nature. >> it does. on the other hand, if you've got a good product people want to buy, that helps. >> you've got ten new airbus 320s coming on stream the next 18 months. it takes the fleet from 56 to 66. where will it take you? a lot of people across the
country may not know the brand. where will you go? >> we are a small player and comfortable being a small player. we are 1.3% domestic industry. where we go from now, our focus will continue to be on l.a. and san francisco. this gives us an opportunity to look at hawaii, other new markets we haven't had the opportunity to penetrate yet. >> competition notwithstanding. >> yes. competition everywhere. >> good to see you, david. david cush, ceo and president of virgin america. currently up 27%. >> thank you very much. let's get over to courtney reagan for a market flash. >> earlier, you told us janna partners is taking a new stake in mcdonald's. it is taking other moves. it upped its stakes in petsmart by 4.75 million shares. walgreen by 1.39 million shares. ebay by a million shares and aig
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courtney reagan is back at hq with more on that. >> the weakest sector in the s&p is the health care sector. leading the way lower, bigeneral followed by gilead science, celgene and aalexion pharmaceuticals. a tough day going into the weekend. >> thanks. let's get the santelli exchange with rick santelli. >> i'm always a tough critic when it comes to the economy. i thought today's data points, michigan even though it was preliminary, was very solid. retail sales was very solid. nonseasonably adjusted retail sales was solid. let's get our guest's opinion. thanks for taking the time this friday morning. >> thank you, rick. >> you heard the set-up. what did you think about this morning's data points? >> they were good, but off a soft september. we need to take it together. it is a decent set-up for the year end. we have to separate what's decent and what's great.
i still think the economy is decent, not great. >> that really is. our economy is decent when we look at our economic bouncebacks from previous periods of tumultuous activity, whether it's credit crisis or recession. when you, most of the comps are to europe. today we had european data. i can understand why we look so much better. they avoid a recession outside italian data points. >> and the extraordinary steps ecb has tried to take to listen to their economies. the sclerosis is more structural than liquidity based. >> that is very important. it's structural. structural issues in europe, even in the u.s., they don't get fixed quickly, do they? >> they don't get fixed quickly. you pile on the debt they have and there is no amount of
liquidity central bankers can rain on them. that will move the needle. >> this morning i enjoyed professor cochran's op-ed regarding disinflation that is not the type we should be garnering all this central bank future activity over. did you read it and do you agree? >> i completely agree. there is central bank manic attitude towards having no deflation. i think it's more because they lose control of their responsibilities rather than it really being an economic philosophy. lower inflation or lower prices can be either because things are more efficient. look at technology or because of lower energy prices. it's a group that inflation or deflation is bad or good is insane. replace inflation with cost of living. lower cost of living is good. a higher cost of living is not good if wages remain stagnant.
>> in the final half minute we have left, the yield curve has been flattening for much of 2014. i've been pointing out 13 days of a tight close in ten, 16 days between 3.03 and 3.10 closie ii yields on a 30-year bond. what does that mean? >> global growth is punk and fed will be raising interest rates well before the market thinks. >> peter, thank you very much. have a terrific weekend. look forward to having you back again. carl, sara and the gang, back to you. >> have a great weekend. up next, we reveal "wine spectator's" number one wine in the world. the conference call.
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pandora shares higher. the stock is now trading almost 12% higher. >> thank you, julia. 'tis the season for holiday dinners and parties. no one wants to celebrate with a bad bottle of red. folks at "wine spectator" have been working hard to compile a list of the best wines of the year. joining us with the big reveal of the year's number one wine is executive editor tom matthews. joins us once again at post nine good. to have you back. we did this last year. you've been doing this all week. >> yes. monday we began unveiling the top ten on wine spectator.com. today is number one and monday is the entire top 100.
>> it's a core interest to our viewers. what is it? >> first time live, nobody ever knows. this is it. our number one wine of 2014 the dow vintage port 2011. >> that was like the oscars for best picture. >> the top rated vintage port of a fantastic vintage. it costs $82 and 5,000 cases were made. >> now that it's number one, how much harder will it be to get? >> walk us through what it's like. give us the notes. >> vintage port is a historic kind of wine made since the 18th century in the douro valley of portugal. the grapes are fermented briefly. then alcohol added to stop the fermentation while the wine is still rich and sweet. that brings it up to 20 degrees of alcohol. that also gives us an incredible aging potential where it could last 50 or even 100 years in the bottle. this is a keeper.
>> is this an after-meal drink? >> the british who drink most portend to have it at the end of the meal with blue cheese or walnuts. it can go with a meal if you like a big, hardy where is wine in terms of growth relative to other types of alcohol. >> it's grown every year nor the last 20 years. we see strong growth because americans are becoming more culinary. they are interested in food and wine is perfect with food.
so the interest in wine has come with the interest in food. >> i'm into lambrusco with pizza. it's a little bubble. >> two trends. that's sparkling line. and champagne and bubbly the wine world is so diverse there is stuff from everywhere there's good. and you are doing some exploring. >> yeah. trend setter. >> that's how i look at you. has weather foiled the market any ways. >> vintage always changes. a great vintage like this lifts a whole wine region. france has had a tough in 14. so look for good wines from 10 and 9. california was fantastic in 12.
there's always something where the weather was fine and the wines are good. >>. the millennial are exploring and going everywhere, looking at everything. we did a cover story on sicily. that is a trending area for millennial. >> your point on inflation and we've seen it broad apply in fo and wine going up. >> this wine at $82 is not inexpensive. the last time a port was number one was in 57. cost 55 dollars but those two bottles now trading at nearly 150. so you can make a good investment if you buy the right
wines. >> good question. you are not going to leave this here are you? >> it is not ready to drink. >> please come back next year. always interesting. >> thanks. thanks for helping us unveil the wine. >> you can read up on all the best upcoming wiensd in the next issue of the wine spectator. >> we have a big lineup. a lot of topics this friday morning. mark cuban comparing what the government is trying to do with net new neutrality to iran. and microsoft overtaking exxon. and finally how mark zuckerberg created a facebook product to ring in a special anniversary with his wife priscilla. all next on "squawk alley." you, my friend are a master of diversification.
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slow growth in the industry. and credit to outlook for the full year as the name sake watches are not selling well overseas. down almost 34%. >> tough day. two weeks until black friday amazon is bringing back a special offer for some prime customers. 30 day free trials for kindle tablets and ereaders. customer who is redeem the offer aren't charged at checkout but will be charged if they don't return the device before the 30 day window expires. deliveries and returns are free. i don't know how great an offer that seems like. >> i'm not sure if it's cunning or desperate. somewhere in the middle probably. >> right because they have had strength in prime, not so much in the hardware. >> before i say goodbye, can i show you where we're trading at the moment. at virgin america of course.
that was the new ipo today. and we created roughly about a quarter of a billion dollars on the price action you see. currently about 1.2, 1.3 billion dollars. 35% was priced at the ipo. the other thing is a, i'm concerned that you are drinking lambrusko wine. let me tell you, drink responsibly. there is nothing worse than drinking the majority of a bottle of the port in the morning. you will be unable to bring your head off the pillow. it is the worst advice. i'm here to help sarah. >> they took the bottle of wine. they did not leave it. and that value typically quadruples. he said that lambruskos were popular. i just want to do a broad market check. virgin america, what a successful debut. we're looking at the dow jones
industrial average. relatively flat. it's down one point off session lows. not a lot of movement with the s&p in positive territory along with the nasdaq. which follows so i s simon. this theme marginal gains and losses. a light week of the economic data. next week fed minutes for one. >> you have to remember where you come from. a month ago with the strong rally up 8% on the s&p and five consecutive record highs. yeah the last two or three days we've not gone anywhere. but the bigger picture is that the very strong rise out ebola fears and the growth. >> a 9.5% rebound since the october 15th low. and there is a lot of bullish momentum going into year end in what is typically a strong time for the markets. simon see you back here at the stock exchange. have a great weekend. carl over to you. >> 8:00 a.m. at google, 11:00
a.m. here an wall street. "squawk alley" is live. joining us, kara swisher co-executive editor at re/code. and kayla tausche here on a relatively flat day. we'll cover tech first. google is shutting down google wallet. in a post the company said it would close the payment service in march next year.